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Andrew Haldane, executive director for financial stability at the Bank of England, said regulators aim to put an end to "miracle" returns from taking on too much risk. "At the height of a boom, both regulators and the regulated are prone to believe in miracles," said Haldane, who is also a member of the Basel Committee on Banking Supervision. "Regulatory measures are being put in place to block off last time's risk strategies, including through recalibrated leverage and capital ratios."

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Adair Turner, chairman of the UK Financial Services Authority, said the EU's stress tests on banks cover sovereign-debt exposure. "I think the European stress tests ... have an adequately stressed approach, and it will be applied across Europe," Turner said. Authorities plan to announce how they will respond to issues revealed by the tests when the results are released, he said.

The Basel Committee on Banking Supervision is meeting in Switzerland to strike a compromise on proposed rules for banks' capital and liquidity. The discussions include 44 agencies from 27 nations and a range of priorities and concerns. Although it is widely agreed that banks should hold more capital, regulators and central bankers are discussing what exactly counts as capital, how much cash banks should hold, the rules' flexibility and other issues. The Basel accord would have a more global effect compared with the overhaul being discussed in the US Senate.

Andrew Haldane, executive director for financial stability at the Bank of England, said regulators aim to put an end to "miracle" returns from taking on too much risk. "At the height of a boom, both regulators and the regulated are prone to believe in miracles," said Haldane, who is also a member of the Basel Committee on Banking Supervision. "Regulatory measures are being put in place to block off last time's risk strategies, including through recalibrated leverage and capital ratios."

EU officials failed to reach an agreement on the creation of three pan-European agencies to oversee banks, insurers and markets. "We are getting closer to the finish line, but there is still some way to go," said Michel Barnier, internal-market commissioner for the EU. "A dynamic and balanced deal is now in reach." Talks are expected to restart at the end of August or in early September, said a source at the European Parliament.

A financial industry group made grave estimates of effects of reforms to the Basel II framework, dubbed Basel III. Regulators and central bankers, however, said the group's estimates should not be considered facts because they rely on hypotheses and assumptions. Difficulties in clearly and accurately estimating effects of regulatory changes are reason enough to error on the side of caution, some industry participants said.